Meta Delays AI Model Release to May Amid Performance Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 13 2026
0mins
Should l Buy META?
Source: stocktwits
- AI Model Underperformance: Meta's AI model, Avocado, has reportedly failed to meet internal benchmarks, underperforming against competitors like Gemini 3, resulting in a release delay to May, which could hinder its competitive edge in the AI market.
- Bearish Market Sentiment: Retail sentiment on Stocktwits has remained in the 'bearish' zone for three weeks, indicating investor concerns about Meta's future performance, with the stock down 3% year-to-date.
- Temporary Licensing Discussions: Executives at Meta's AI division are reportedly discussing the possibility of temporarily licensing Gemini technology to enhance the company's AI products, although no final decisions have been made, which could influence Meta's technological trajectory.
- Impact of Capital Expenditure Plans: Despite a strong earnings report in late January that initially boosted Meta's stock, plans to ramp up capital expenditures, coupled with a broader tech sector sell-off, have led to a decline in stock price, reflecting market caution regarding future investments.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 604.060
Low
655.15
Averages
824.71
High
1117
Current: 604.060
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- User Engagement Surge: Meta's use of AI technology to enhance user engagement on Facebook and Instagram has resulted in a 30% year-over-year increase in time spent on Instagram Reels, significantly driving advertising revenue and strengthening the company's competitive position in the social media market.
- Record Revenue Achievement: In 2025, Meta achieved a record revenue of $200.9 billion, a 22% increase from the previous year; despite a slight 3% decline in net income due to a one-off tax provision, excluding this provision would have resulted in a 20% profit growth, showcasing the company's robust profitability.
- Soaring Capital Expenditures: Meta's AI-related capital expenditures reached $72.2 billion, an 84% increase, which, while not immediately impacting profits, poses long-term profitability challenges, especially with Reality Labs facing a staggering $19.2 billion loss.
- Market Valuation Potential: With a current market capitalization of $1.5 trillion, Meta is projected to reach $3 trillion within three years; if Wall Street's earnings forecasts hold true, Meta's stock would need to rise 82% by the end of 2027 to match the Nasdaq-100's P/E ratio, indicating significant investment potential.
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Meta Platforms' AI-Driven Revenue Growth
- User Engagement Surge: Meta's use of AI technology to enhance user engagement on Facebook and Instagram has resulted in a 30% year-over-year increase in time spent on Instagram Reels, significantly driving advertising revenue and strengthening the company's competitive position in the social media market.
- Record Revenue Achievement: In 2025, Meta achieved a record revenue of $200.9 billion, a 22% increase from the previous year; despite a slight 3% decline in net income due to a one-off tax provision, excluding this provision would have resulted in a 20% profit growth, showcasing the company's robust profitability.
- Soaring Capital Expenditures: Meta's AI-related capital expenditures reached $72.2 billion, an 84% increase, which, while not immediately impacting profits, poses long-term profitability challenges, especially with Reality Labs facing a staggering $19.2 billion loss.
- Market Valuation Potential: With a current market capitalization of $1.5 trillion, Meta is projected to reach $3 trillion within three years; if Wall Street's earnings forecasts hold true, Meta's stock would need to rise 82% by the end of 2027 to match the Nasdaq-100's P/E ratio, indicating significant investment potential.
See More
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China Review: A $2 billion sale involving Meta has been reported, highlighting significant financial movements in the tech industry.
Founders Barred: The founders of the company involved in the sale have been restricted from leaving the country, indicating potential legal or regulatory issues.
See More
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- Incentive Program: Facebook's newly launched Creator Fast Track program offers guaranteed payments of $1,000 per month for influencers with at least 100,000 followers, increasing to $3,000 for those with over 1 million followers, aiming to attract more content creators to boost user engagement on the platform.
- User Time Comparison: Despite having a significant male user base aged 18-24, Facebook users spend an average of just 19 hours per month on the platform, significantly lower than TikTok's 33 hours and YouTube's 27 hours, highlighting Facebook's struggle to attract video content engagement.
- Video View Increase: Meta's management reported a 7% lift in Facebook video views due to optimization efforts, indicating that the company is enhancing video content appeal through internal adjustments rather than relying solely on organic growth from user-generated content.
- Strategic Implications: By incentivizing influencers, Facebook aims to enhance engagement among younger users and maintain relevance in a competitive social media landscape, although the long-term effectiveness of such short-term incentives remains questionable.
See More
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- Chip Launch: Arm unveiled its first internal AGI CPU chip in San Francisco, specifically designed for AI inference in data centers, with an expected annual revenue of $15 billion by 2031, showcasing the company's strong competitive position in the rapidly growing AI market.
- Customer Base Expansion: Major clients such as Meta, OpenAI, Cloudflare, and SAP are among the first users of the new chip, indicating strong market demand for Arm's latest product and reflecting the company's strategic positioning in the AI sector.
- Significant Revenue Projections: Arm anticipates total annual revenue reaching $25 billion by 2031, a sixfold increase from $4 billion in 2025, with CEO Rene Haas stating that this forecast will drive earnings per share to $9, significantly boosting investor confidence.
- Positive Market Reaction: Arm's stock rose approximately 13.2% in premarket trading, with analysts calling the announcement the most significant shift in the company's history, projecting $7.5 billion in incremental gross profit and $5 billion in operating profit, further solidifying its market position.
See More
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- Chip Launch: Arm unveiled its first in-house chip, the AGI CPU, in San Francisco, projecting $15 billion in revenue by 2031, showcasing the company's strong potential in the AI inference market and solidifying its position in the semiconductor industry.
- Revenue Expectations Surge: Arm anticipates total annual revenue of $25 billion, a sixfold increase from $4 billion in 2025, demonstrating the company's competitiveness and profitability in the rapidly growing AI market.
- Positive Market Reaction: Following the chip announcement, Arm's stock rose approximately 13.2% in premarket trading, reflecting investor optimism about the company's future growth prospects, despite a 1.5% decline on Tuesday.
- Expanded Customer Base: Meta is the first official customer for Arm's new chip, with Arm's cloud AI head noting a $1 trillion market size, indicating that the chip will attract more customers opting for its solutions over in-house alternatives, thereby expanding the company's market share and profit opportunities.
See More
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See More
